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Showing 481 to 500 of 1239 Records
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2012 (12) TMI 760 - ITAT MUMBAI
Deduction under section 80IA - CIT(A) deleted the additions on account of disallowances u/s 153A - infrastructure projects where the assessee is merely a work contractor or developer - Held that:- According to sub-clause (a), clause (i) of sub-section (4) of section 80-IA, the word 'it' denotes the enterprise carrying on the business. The word 'it' cannot be related to the infrastructure facility, particularly in view of the fact that infrastructure facility includes Rail system, Highway project, Water treatment system, Irrigation project, a Port, an Airport or an Inland port which cannot be owned by any one. Even otherwise, the word 'it' is used to denote an enterprise. Therefore, there is no requirement that the assessee should have been the owner of the infrastructure facility.
The assessee utilizes its funds, its expertise, its employees and takes the responsibility of developing the infrastructure facility. The losses suffered either by the Government or the people in the process of such development would be that of the assessee. The assessee hands over the developed infrastructure facility to the Government on completion of the development. Thereafter, the assessee has to undertake maintenance of the said infrastructure for a period of 12 to 24 months. During this period, if any damages are occurred, it shall be the responsibility of the assessee. Further, during this period, the entire infrastructure shall have to be maintained by the assessee alone without hindrance to the regular traffic. Therefore, it is clear that from an undeveloped area, infrastructure is developed and handed over to the Government and as explained by the CBDT vide its Circular, dated 18-5-2010, such activity is eligible for deduction under section 80-IA(4). This cannot be considered as a mere works contract but has to be considered as a development of infrastructure facility. Therefore, the assessee is a developer and not a works contractor as presumed by the revenue. The circular issued by the Board clearly indicate that the assessee is eligible for deduction under section 80-IA(4). The department is not correct in holding that the assessee is a mere contractor of the work and not a developer.
Nothing either on facts or in law, which distinguishes, the already existing position as on the date of search and in the proceedings under section 153A read with 143(3), which substantiates the denial. Accept for the interpretation, as made out by the AO, there is nothing, which could substantiate the disallowance. In the entire proceedings upto the hearing before us, the department has not even said that there was either no agreement between the assessee and the state government or there is any change in the agreement entered into by the assessee and the government department. In fact the DPB filed by the department there are letters exchanged, written by the assessee and various government departments, which indicate that the assessee was awarded the job, wherein the assessee had placed the bank guarantee for ₹ 2,61,62,400, against the tendered cost. This proves beyond doubt that the assessee, itself was doing the development of infrastructure facility, on behalf of the government, besides placing its own funds at risk and peril - thus no disallowance u/s 80IA(4)warranted - in favour of assessee.
Deduction u/s 80IA on the amounts written back under section 41(1) - Held that:- It is not the case of the department that these liabilities were non business. When the liabilities which have been written back/offered to tax by the assessee pertains to the business, then it has to be added back as a business income. CIT(A) has also taken note of the fact that the assessee was having two types of projects, i.e., which qualify for deduction under section 80IA and which do not qualify. But here, in the instant case, we are concerned with domestic projects, and the ceased liabilities are emanating from the normal course of business of the assessee. Hence the liabilities written back would be added to the claim of deduction under section 80IA. Since the assessee also has non-80IA projects and it has been accepted by the assessee that these written back liabilities would also pertain to non 80IA projects, in these circumstances, the assessee and the CIT(A) were very reasonable in allocating the income offered under section 132(4) on account of cessation of liabilities under section 41(1) in proportion of the turnover of 80IA project and non 80IA projects - no reason to deviate from the finding reached by the CIT(A) to direct the AO to add the proportion of offered amount of ₹ 1.95 crores to the income eligible for deduction under section 80IA for assessment year 2005-06.
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2012 (12) TMI 759 - DELHI HIGH COURT
Deduction u/s 80IA - whether the amount of loss suffered in the Avitech Division was rightly set off against the profits from the eligible vaccine unit - Held that:- A fair and objective reading of the record would reveal that the assessee’s claim was inadmissible under Section-80IA because the second Unit was located within the same premises and could not, therefore, be characterised as a “separate undertaking”. Once the assessee decided to open the separate division in the same premises, he cannot claim the benefit of Section 80IA as far as that activity is concerned.
In none of the orders of AO or CIT (A) no such contention that the Avitech undertaking was located within the same premises as the other poultry vaccine division or undertaking was raised before the Tribunal. Certainly, the grounds recorded by the Tribunal do not reflect this. Being a pure question of fact, this Court would not interfere with the conclusions of the authorities below on this aspect. As far as the legality of the conclusions are concerned, the Court notices that the Tribunal and the CIT (A) relied upon the ruling of the Supreme Court in CIT v. Canara Workshops [1986 (7) TMI 5 - SUPREME COURT] assessee is entitled to a deduction on the entire profits of one priority industry without deducting loss in the other priority industry - no substantial question of law arise.
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2012 (12) TMI 758 - ITAT MUMBAI
Short Notice Pay for Termination of Toll Manufacturing Agreement – Capital vs Revenue Expenditure – Held that:- The test of commercial expediency cannot be reduced to the shape of a ritualistic formula, nor can it be put in a water-tight compartment. All that the law requires is that the expenditure should not be in the nature of capital expenditure or personal expenditure of the assessee and it should be wholly and exclusively laid out for the purposes of the business. It is well-settled that items of expenditure are to be considered from the point of view of a normal, prudent businessman. Business expediency was not established by the assessee at any stage of hearing, including hearing before us, for making payment to CCL in violation of the agreement. If sanctity of agreement can be ignored for the sake of argument, even then the vital question of establishing business expediency remains unanswered.
In the case under consideration there is neither any danger of dent to the goodwill of the assessee nor adverse affect was looming large over the business carried on by the assessee-breach of agreement was not by the assessee. If CCL without giving stipulated notice terminated the agreement, then goodwill of the CCL would have been at stake. If any step for maintaining confidence had to be taken then that step had to be of CCL. In these circumstances we are of the opinion that if the AO could not find nexus between the expenditure incurred and the purpose of the business in the said transaction, he was justified.
Business expediency was not established by the assessee at any stage of hearing, including hearing before us, for making payment to CCL in violation of the agreement. If sanctity of agreement can be ignored for the sake of argument, even then the vital question of establishing business expediency remains unanswered. - order of AO is upheld – Appeal by assessee is dismissed.
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2012 (12) TMI 757 - ITAT, INDORE
Unexplained Expenditure u/s 69C – Shortage of Cash – Held that:- The appellant’s books has been obtained and it transpires that all the payments have been made through Bank of India and there is apparently no correlation with any of the amount appearing in the seized papers - addition made is hereby deleted.
Difference in Stock – Held that:- Impugned addition made by the Assessing Officer merely on the presumption that the assessee kept changing his version about difference in stock and no justifiable reason was adduced in the assessment order for making the addition, therefore, the CIT(A) rightly deleted the same.
Unexplained Purchase of goods – Held that:- Additions made on the plea that bill no. 4 dated 19.1.2007 of M/s Guru Nanak Traders for an amount of Rs. 3,55,000/- was found at the business premises of the assessee. The assessee tendered in his statement that the goods mentioned in the bills have not been delivered till date and were transported through Sanjay Transport Company of Jabalpur on 20.1.2007 only. Identically bill bearing no. 76 dated 20.1.2007 of M/s Jeetu Steels for Rs.1,20,365/- was found which was issued in the name of Shreenath Traders. The assessee claimed that he did not purchase the goods appearing in the bill. On perusal of the observations the explanation offered by the assessee justification in the conclusion of the CIT(A) exists - appeal of the revenue having no merit therefore, dismissed.
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2012 (12) TMI 756 - ITAT, CHENNAI
Unexplained Addition u/s 69 – mis match of dates as mentioned in the bokiyam agreements and in the statements recorded from the tenants - Held that:- It remains a fact that each of the persons, who were examined had confirmed the payment of bokiyam there is a fair chance that when statements were recorded, concerned tenant could have made a mistake as to the exact dates of payments. None of the authorities sought any explanation from the assessee for the mismatch of dates. None of the authorities sought any explanation from the assessee for the mismatch of dates. Assessee had produced affidavits, which was not considered by the Commissioner of Income Tax(Appeals).
Assessee has to be given a chance for explaining the mismatch of dates and justify how the bokiyam receipts could be considered as a source of investment for the supri street property - in favour of assessee for statistical purposes.
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2012 (12) TMI 755 - ITAT, JAIPUR
Disallowance of electricity expense - apartment in a building by the name `Heera Panna’ - Held that:- As the assessee could not evidence the said claim that the apartment, belonging to a close relative, is being used as a conference room, i.e., for meeting the patients, etc. the disallowance stood restricted to Rs. 16,497/-, on the assessee leading evidence to the effect that the actual expenditure qua the said apartment had been wrongly assumed by the AO, and was in fact only at the said amount
Liability becomes due for payment by the year-end or not? - Held that:- This is as undisputedly all the bills in the present case stand raised only in the month of April, 2007. In fact, the amount does not become due for payment immediately on the raising of the bill, as certain time lag is necessary for its communication to the payer, besides allowance of certain time period for effecting the payment is also necessary. The due date, which represents the last date for payment, though not clarified, would only be subsequent to the raising of the bill, which itself is in the second week of April, 2007 - in favour of assessee.
Non deduction of TDS - technical services covered u/s. 194J – Held that:- With regard to the application of section 194J, i.e., qua technical services payment made to under-graduate students, undergoing three-year diploma in Ophthalmology, leading to the qualification of an Ophthalmology Assistant, paid during third (final) year of their course. The students are enrolled for the program after passing Class 12. It is only after the successful completion of this program that they would qualify as professionals, capable of rendering either professional or technical services. The same is only an allowance to an apprentice or an intern, rightly termed as a stipend, which is defined as a sum of money paid to the students for living expenses. As regards the balance payment (of Rs. 7,79,740/-) to the doctors undergoing post graduation, rather super-specialty courses, the same are highly technical courses, admission to which it is severely restricted and regulated, and only upon meeting high standards of professional competence prescribed for the purpose and is not covered under the provisions of sec.194J.
Following the decision of in case of Merilyn Shipping and Transports vs. Addl. CIT 2012 (4) TMI 290 - ITAT VISAKHAPATNAM ] provisions of section 40(a)(ia) would apply only to the amount outstanding as at the year-end. The assessee’s alternate ground is also to be allowed, even as no amount of stipend is liable for disallowance u/s. 40(a)(ia) of the Act - assessee succeeds.
Disallowance of various expenses in part – Held that:- Onus to prove the expenditure to the satisfaction of the AO is on the assessee. Besides, the expenditure claimed is u/s. 37(1), which, therefore, has necessarily to be proved as having been actually incurred and, further, wholly and exclusively of the purpose of the assessee's business. When the factum of the expenditure is not proved, which can only be on the basis of some reliable evidences/ materials, which have been found missing in the present case, a part disallowance by the Revenue cannot be faulted with - Disallowance of expense is restricted to 10%, as against 20% by the Revenue to meet the ends of justice.
Disallowance of Discount - Held that:- Addition of Rs. 1 lakh to cover the leakage of Income is not on account of enhancement in income, as stated by the AO, who in fact has disallowed the discount presumed to have been allowed by the assessee on his receipts. No basis whatsoever, including the absence of the patient register, to infer the assessee as having allowed the discount against every bill raised by it and, secondly, of the same being not genuine - no merit in his sustenance of the said disallowance by CIT(A) and is therefore deleted - In the result, assessee's appeal is partly allowed.
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2012 (12) TMI 754 - ITAT, CHENNAI
Setting Aside of Assessment u/s 263 – Held that:- Appeals filed by the assessee for both the years were on substantially different issues, vis-ŕ-vis the issues for which proceedings under Section 263 were initiated and completed by the Commissioner of Income Tax, therefore CIT(Appeals) was obliged under law to deal with the grounds taken by assessee for the respective Assessment Years, since orders under Section.263 did not cover these aspects.
Set aside the orders of the CIT(Appeals) for both the Assessment Years and remit the matter back to him for re consideration - appeals of the assessee for both the years allowed for statistical purposes.
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2012 (12) TMI 753 - ITAT, KOLKATA
Statutory exemption u/s 10(10C) – disallowance as VRS Benefit exceeding T.D.S. certificate amount - Held that:- Decided in favour of assessee relying on Sail Dsp Vr Employees Association 1998 Versus Union of India And Others.[2003 (2) TMI 46 - CALCUTTA HIGH COURT] wherein held that it is a deferred payment of the benefit receivable under the voluntary retirement scheme. Therefore, it would not be payment of salary outside the scope of section 10(10C). The characteristic cannot be changed because of stretching over the period of payment of dues under the scheme - against revenue.
Claim u/s 10(10AA) as well as relief u/s 89(1) – disallowance for want of evidence - Held that:- CIT(A) not justified in refusing the claim of assessee by simply stating that the revised computation was filed on 30.10.2006 and the time limit for filing revised return was available upto 31.03.2005. It is further observed that in order to claim relief u/s 89(1) of the IT Act the assessee is supposed to furnish the details in the prescribed form. Therefore, in the interest of justice we set aside both the issues to the file of AO to decide the same after giving a reasonable opportunity of being heard to assessee.
Charging of Interest u/s 234D – Held that:- AO is directed to re-compute the same after giving effect to this order - appeal of assessee is partly allowed for statistical purposes.
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2012 (12) TMI 752 - ITAT, CHENNAI
Sale of land – Long Term Capital Gains - Whether repayment of the mortgage debt created by the assessee, is an expenditure incurred in connection with the transfer of mortgaged asset allowable under section 48(i) - Held that:- As decided in Salay Mohamad Ibrahim Sait Versus Income-Tax Officer And Another [1994 (5) TMI 18 - KERALA HIGH COURT] the amounts spent for discharge of the mortgage is not liable to be deducted in the computation of capital gains under section 48 of the Act.
Assessee is not entitled to the deduction of the expenditure incurred to remove encumbrance created by the assessee himself - CIT(A) has fell in error in allowing the appeal of the assessee and in coming to the conclusion that transfer of property has taken place way back in the financial year 1988-89. Moreover, it was the liability of the assessee to redeem the mortgage. The assessee cannot claim the redemption amount as deduction under the unambiguous provisions of section 48 to arrive at the capital gains - Impugned order of the CIT(A) is set aside and allow the appeal of the Revenue - appeal of Revenue is allowed.
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2012 (12) TMI 751 - ITAT, CHENNAI
Additions on account of unexplained investment on construction of house - deduction of Cost of construction incurred by the tenant - internal decoration of the building was carried out by the tenant - Held that:- CIT(A) found that, the quality of material used was not of very high quality and he personally supervised the construction and taken care to purchase the material in person. - After considering the argument of the assessee, it is reasonable to allow 15% relief towards purchase of materials and self supervision. - The amount spent by the tenants was worked out at Rs. 7,39,850/-. This was not given credit by the Assessing Officer. It is common practice now a days to do internal work like decoration, furnishings, etc. by the corporate tenants to improve the ambience of the building.
The order passed by the CIT(A) is a well-reasoned and detailed order giving valid reasons for partly allowing the appeal of the assessee. - Revenue's appeal dismissed.
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2012 (12) TMI 750 - ITAT, CHENNAI
Interest Income – Business Income v/s Income from Other Sources – Held that:- There is no direct nexus between interest income and income derived out of exports therefore, the lower authorities are justified in treating the interest income as income from other sources - This common ground is accordingly dismissed.
Rent received from its employees against allotting them dwelling units – Held that:- Nature of the recovery made from the employees is that the recovery goes to reduce the staff welfare expenses in the hands of the assessee-company. The rent recovery made from the employees is not an independent income or a different source of income. The assessee is providing residential quarters to the employees against which a nominal rent is recovered from them. The recovery ultimately reduces the cost in the hands of the assessee. Therefore, the recovery is in the nature of business income. This is because it reduces the business expenditure - rent recoveries as business income in the hands of the assessee company – in favour of assessee.
Recovery of pay for notice period and other recoveries from employees for certain facilities like telephone calls and similar utilities,these recoveries are in the nature of business income are to be treated as business income in the hands of the assessee - appeals filed by assessee are partly successful.
Deduction of expenditure incurred in foreign exchange from total turnover profits from business – Held that:- As the export sales are more than 75% of total sales. CIT(A) has failed to appreciate that after the amendment to section 10B with effect from 1-4-2001, the eligible deduction would be profit proportionate to the export turnover upon total turnover. The CIT(A) has rightly held in favour of the assessee because the provision for full exemption was omitted from the statute book only with effect from the assessment year 2002-03. Therefore, the provision does not apply to the impugned assessment year 2001-02 - This issue is accordingly decided against the Revenue.
Depreciation allowance – Held that:- Issue is remitted back to the AO for adjudicating the issue after examining the relevant materials afresh. The issue is remanded back to the Assessing Officer - In result,appeals filed by the assessee are partly allowed.
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2012 (12) TMI 749 - ITAT, AMRITSAR
Brokerage Expenses – adoption of Fair Market Value - reference u/s 142A - Held that:- Assessee has filed his objection on 16.12.2009 alongwith documents which were forwarded by the AO to AVO, who has given revised report dated 23.12.2009, which was not confronted to the assessee, which is contrary to the provisions of section 142A AO is duty bound to give assessee an opportunity of being heard such report and making such assessment meaning thereby before completion of the assessment, the AO has to give an opportunity of being heard to the assessee, which has not been granted to the assessee and is contrary to the provisions of section 142A. In the interest of justice, order passed by first appellate authority is not according to law - impugned order deserves to be cancelled, same is cancelled and set aside the issue to the file of AO to decide the issue in dispute afresh in accordance with law after giving opportunity of being heard to the assessee for substantiating the claim and dispute especially on the objections filed by the assessee - AO has to decide the same after providing sufficient opportunity to the assessee before completion of the assessment - appeal of assessee is allowed for statistical purposes.
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2012 (12) TMI 748 - ITAT, KOLKATA
Eligibility of deduction u/s. 80IC(2) - Initial Assessment Year - Held that:- Accepting to the issue that commercial production and not trial production determines the beginning of manufacture or production of articles or things. However, when actual production has began and sales has also been effected of manufactured goods and there is no sales return, that such production is still a trial production just because the consent order from the Pollution Control Board, Assam has not been received to begin the manufacture or produce any articles or things or commences operation as required u/s. 80IC is unsustainable.
The facts in the present case clearly show that the assessee has began to manufacture the calcinated petroleum coke using the raw material of petroleum coke before 31-3-06 and the sale of finished products would clearly establishes the commencement of operation. In the circumstances, ‘initial assessment year’ for the assessee to claim deduction u/s. 80IC(2) is the year 31-3-96 relevant to the AY 1996-97.
Coming to the claim of the assessee that it has capitalized the expenditure till 18-9-96 and the same has also been accepted by the revenue, not convinced by the said claim as nothing stopped the assessee from claiming expenditure thereto as a revenue expenditure. There is no assessment order for the AY 1996-97 or 1997-98 specifically accepting the claim of the assessee.
Further, there is also no scrutiny assessment order accepting the claim of the assessee that the initial AY in the case of the assessee for claiming of deduction u/s. 80IC is the AY 1997-98. In the circumstances the initial assessment year for the assessee for claiming of deduction u/s. 80IC(2) is held as the assessment year 1996-97. Consequently, the assessee would not be entitled to claim of deduction u/s.80IC(2) for the impugned AY 2006-07. In the circumstances, the finding of CIT(A) stands reversed and that of the AO restored - in favour of revenue.
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2012 (12) TMI 747 - ITAT, AMRITSAR
Unexplained Cash Credits – Held that:- The assessee had provided complete addresses of all the persons from whom the assessee had received the advances. The explanation of the assessee that advance so received was for the purpose of purchase of gold jewellery having been purchased for few of the persons have been debited to their accounts and rest of the persons because of the price rise in the gold, the gold could not be purchased and the amount was returned up to 31.03.2006. During the remand proceedings, the AO chose to examine 19 persons out of which 3 persons had expired for which the relevant documents to confirm the advance were submitted, is not under dispute. As regards the rest of 16 persons, they were examined and had confirmed that the said advance was given by the assessee. This is also not under dispute. The assessee out of Annexure-B chose to file confirmations of 23 persons, which were filed is not under dispute.
Thus when the AO was in the possession of complete addresses of each every depositors, it was the duty of the AO to call for the information, confirm or examine them to find out the identity, creditworthiness and genuineness of the transaction. But the AO chose not to act and use powers vested with him u/s 131 or u/s 133 (6). When the assessee had discharged the onus of proving identity, creditworthiness and genuineness of the transactions, there is no reason of making any addition on account of unexplained cash credits, which in fact, are the trade creditors. AO directed to delete all the additions - in favour of assessee.
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2012 (12) TMI 746 - ITAT, AMRITSAR
Re opening of assessment – Held that:- Once the notice under section 142(1) had been issued, the machinery for assessment was already set in motion for the words in section 142(1) for the purpose of making assessment under this Act, the AO was required to complete the assessment u/s 143(3) without issue of notice u/s 148, on or before the expiry of period ending on 31.12.2008 under section 143(3). Though assessment has been made in the present case on 26.12.2008 – with out issuing notice under section 143(2). At the same time, the AO cannot enter into jurisdiction for reassessment u/s 147/ 148 when there was time left for completion of assessment under section 143(3) for which notice under section 142(1) had already been issued and the assessment proceedings had already been started.
Therefore, the notice issued u/s 148 by the AO was bad in law and therefore, assessment so framed was bad in law and therefore, assessment so framed is quashed - in favour of assessee.
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2012 (12) TMI 745 - ITAT, KOLKATA
Unexplained Opening Capital Balance – Held that:- Except in respect of FDs with M/s. Duncan Industries and cash in hand, all other investments have been substantiated and also accepted by the AO. The assessee brought evidence to show that FDs with M/s.Duncan Industries Limited were made before 1-4-09 and consequently, it is not liable to be treated an unexplained expenditure/investment and the addition of Rs.4,05,000/- on a/c of FDs with M/s. Duncan Industries Ltd stands deleted for the AY 2000-01 under appeal - assessee’s appeal is allowed.
Unaccounted Cash - in - hand - Held that:- Holding of cash of Rs.3,03,000/- from the date of creation of the will of assessee’s Mother till 31-3-99 has been produced and will is also not a registered will no evidence whatsoever has been placed to substantiate the claim - claim amount of Rs.3,79,685.89 including the cash of Rs.3,03,000/- does not find any merit - in the circumstances, the addition of Rs.7,84,685.89 stands reduced to Rs.3,79,685.89.
Disallowance of business loss and interest on bank O/D – Held that:- Assessee has not placed any evidence to substantiate his claim as shown in the trading and P & L account in these circumstances, thus disallowance of business loss as made by the AO and confirmed by the CIT (A) does not call for any interference - against assessee.
Disallowance of bank interest on O/D - Held that:- Assessee has converted the FDs into MIS with West Bengal State Co-operative Bank Ltd. As the assessee has not been able to substantiate the use of the O/D for business, finding of the AO in disallowing the same and as confirmed by CIT (Appeals) is on right footing and does not call for any interference- against assessee.
Legal expenses – Disallowance as not shown in the original return - Held that:- A perusal at the assessee’s paper book copy of the bill shows that a bill from the advocate has been placed by the assessee detailing the expenditure and that has not been examined by the Assessing Officer. In the circumstances issue is restored the file of AO after granting adequate opportunity of hearing to the assessee to substantiate his claim - in favour of assessee for substantial purposes.
Payment made to Land Broker - Held that:- Assessing Officer has not disputed the existence of agreement or veracity of agreement. The agreement having been accepted, the expenditure incurred by the assessee on account of agreement is liable to be allowed - AO directed to delete the disallowance being the amount paid to the land broker while computing the long-term capital gains - in favour of assessee.
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2012 (12) TMI 744 - ITAT, AMRITSAR
Trading Additions – rejecting of books of accounts - Held that:- The stock is valued on physical verification by the management adopted in the earlier years and has been accepted by the department consistently and there is no change in the method of accounting. In this regard, there is nothing shown by the assessee before any authorities that why the stock register of one thousand items or above cannot be maintained or not possible to be maintained. Therefore, when closing stock and opening stock are valued on the estimated basis, having no relevance with the quantitative details of purchases and sales, then any figure as estimated by the management is on adhoc figure of closing stock and therefore, directly effects the Gross Profit of the assessee and the profits deduced cannot be said to be accurate. In the facts and circumstances of the present case, no infirmity in the order of the A.O. who has rightly invoked the provisions of section 145(3) in rejecting the books of account - in favour of revenue.
Estimation of income - Held that:- There was fluctuation in the exchange rate, increase in the cost of manufactured items and other over head expenses and the assessee has discarded the export of high value items which attributed to GP rate in the earlier years at 60-62% as compared to the GP rate of 22-24% on regular items. These aspects were not taken into consideration by the AO. The estimates by the AO cannot be on surmises and conjectures. There has to be some material on record to make such estimation. The case of its Sister concern is quite distinguishable on the facts as that in that case, the assessee had been declaring GP rate of about 58% in the preceding three years whereas the assessee had declared 39% during the assessment year 2004-05 and 31.11% in the assessment year 2005-06. Therefore, the percentage of G.P. rate declared in the case of Sister concern is quite different in the preceding years to that of the assessee in the preceding years as has been accepted by the department - thus even if the books having been rejected, no addition is called for - in favour of assessee.
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2012 (12) TMI 743 - CESTAT, BANGALORE
Penalty levied u/s 117 of Rs. 1,00,000/- - Non approval of the Commissioner of Customs for management, operation and maintenance of warehousing facilities - Held that:- Section 117 of Customs Act 1962 provided for a penalty not exceeding Rs. 10,000/- during the relevant period when offence was committed. The amount of Rs. 10,000/- (not Rs. 1,00,000/-) is not the minimum or is a mandatory penalty. It is the maximum limit for imposition of penalty.
Although the law had been violated but the intention was not malafide - mens rea is not required for imposition of penalty u/s 117 thus this is a case wherein a nominal penalty is required to be imposed and not the maximum penalty - penalty of Rs. 1,000/- would meet the ends of justice - in favour of assessee as directed.
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2012 (12) TMI 742 - DELHI HIGH COURT
Quashing and setting aside of appointment of Member/Acting Chairman of BIFR - whether the impugned order dated 31.10.2011 and the approval of the ACC i.e. instead of 3 years up to age of 65 years is valid or not - Held that:- Respondent No. 4 Member/Acting Chairman of BIFR was appointed as Member of BIFR vide Notification dated 20-10-2008 and following old practice it was inadvertently specified in said Notification that respondent No. 4 was appointed for a period of 3 years w.e.f. date of assumption of charge, and as per said Notification, his tenure would come to an end on 13-10-2011. Vide impugned Notification dated 31-10-2011, respondents modified earlier Notification and made it applicable till respondent No. 4 attained age of 65 years, i.e., 9-1-2013 or till abolition of BIFR or until further orders, whichever event occurs earliest - It is not in dispute that as per Section 6 of SICA, the Chairman and Member shall hold an Office not exceeding 5 years or till he or she attains the age of 65 years - no merit in the instant petition.
As per Section 6 of the SICA, the member/Chairman can hold an office for a period of not exceeding 5 years or till he or she attains the age of 65 years.ACC is the competent authority, who has to take decision out of the proposal made by the concerned Ministry. In the present case, note prepared by the Secretariat of ACC and proposal sent by the Ministry were put up before the ACC. After perusing the same, the ACC approved the appointment of respondent no. 4 till he attains the age of 65 years or till abolition of BIFR or until further orders, whichever event occurs the earliest. Undisputedly, as per past practice the tenure of the members have been 3 years. However, the ACC has not done anything contrary to the Act or contrary to the proposal sent by the Ministry. The ACC simply ignored the term of 3 years and rest of the proposal has been approved as it is. The ACC is not bound to take decision, as it is, the proposal placed before it. It being the competent authority empowered to take any decision permissible in law.
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2012 (12) TMI 741 - CESTAT NEW DELHI
Denial of Cenvat Credit - input service distributor - services of M/s. Ernst & Young Pvt. Ltd. were used for the project of Certified Emission Reduction Sale of Carbon - Held that:- The services availed from M/s. Ernst & Young Pvt. Ltd., were admittedly for modernisation of the power plant of the appellant. Such power plant is used for manufacture of paper which is liable to Central Excise. In addition, if the appellant, by way of entering into an agreement with the England based company gets profit by way of earning carbon credit, it cannot be held that said services of M/s. Ernst & Young Pvt. Ltd., were for the purpose of earning the credit.
Show cause notice itself admits the factum that the consultancy service provided by M/s. Ernst & Young Pvt. Ltd., to the appellants was to facilitate them in installing projects of high technical equipments to the power plant in which fossil fuel like rich husk are used which reduces carbon emission. They again submitted that installing projects of high technical equipment is nothing but Modernisation of a factory and as per Cenvat credit Rules, 2004, services used in relation to modernisation are eligible for Cenvat credit. Admittedly, the main activity of the appellant is to manufacture paper for which electricity is used from captive power plant & as the paper being manufactured by them is leviable to excise duty no reason to deny the benefit of Cenvat credit availed on the said services - in favour of assessee.
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